Choosing Chapter 7 or Chapter 13 Bankruptcy

: Chris Lee Law Firm

  Filed under: Bankruptcy


When you realize you will not be able to catch up on your debt and the creditors are calling. Your next question could be what type do I file when considering bankruptcy? Speaking to an experienced bankruptcy attorney can help you understand which type of personal bankruptcy would suit your situation best.


Your attorney will look at your income, debt, living expenses, and assets to determine if you have any extra income to repay your debts. If you pass the means test (your income less or equal to the median income in your region), you will be able to file Chapter 7 bankruptcy. If you make more than the median income in your area or have significant assets you would like to keep; you may want to file Chapter 13 bankruptcy.

Chapter 7

With a Chapter 7 bankruptcy, all of your qualifying unsecured debt will be eliminated within three to six months. With this type of bankruptcy, your nonexempt assets could be sold to satisfy your creditors. Due to the generous exemptions, most people lose little to no property in bankruptcy.

Chapter 13

In a Chapter 13 bankruptcy, you will keep all of your assets and pay a court-approved repayment plan. The plan will last either three or five years, depending on your level of income and debt. At the end of the repayment period, any remaining qualifying unsecured debt will be eliminated.


If all of the requirements were met for a Chapter 7 or a Chapter 13 bankruptcy, you would receive a discharge, and all of your qualifying debt will be eliminated. Some debt will never be discharged no matter what type of bankruptcy you choose. Obligations such as alimony, child support, or fees owed to government agencies will not be removed.

Contact a Plano bankruptcy attorney to determine what bankruptcy code will be the best option for you and your family.

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